It doesn’t have to cause so much apprehension as long as you are aware of what it is used for and what it can actually do for you.

Your Fico score helps issuers of credit decide and assess how you will more than likely pay on your debt. It’s used by most lenders to determine if you are a good risk. There are three credit bureaus that most lenders report to: Experian, TansUnion and Equifax. Scores range from 350 to 850. The higher the score the more lenders want your business and the better the terms are for the credit!

Here are some things you will want to AVOID AT ALL COSTS in order to keep your fico score in the higher digits.

MAKING LATE PAYMENTS, Payment history accounts for a whopping 35 percent of your score. Needless to say paying late is one of the worst things you can do. The more times late 30, 60 or 90 days, the more damage it will do to your credit. Making payments late can cause you to lose up to 200 points.

MAXING OUT CREDIT CARDS. Believe it or not when you max out your credit cards your available credit decreases compared to your available credit. Keep balances low or pay off those cards. Keeping your cards Maxed can cause you to lose about 100 points on your credit.

INQUIRES. While some like to say there is a difference between a hard inquiry and soft inquiry, the both impact your scores. So it’s always in your best interest not to have your credit run numerous times. The internet can be a killer on inquires. I had a client shopping for a mortgage once through the internet; she went to one of those sites where lenders compete for your loan. Well, all 10 lenders pulled her credit and her fico scores dropped. Needless to say she was not happy. Excessive credit pulls/inquiries can drop your credit score by 30 to 60 points! So beware.

CLOSING OLD CARDS. Who knew, you think you are doing something good and it bites you in the H____y! Once you close old cards your available credit decreases which in turn will impact your scores. Unless the card has annual fees where you just want to get rid of it. Having old accounts on your credit does not hurt you only closing the accounts do. Impact on credit up to 100 points!

So keep these things in mind and above all check your own credit at least one to two times a year to make sure you are not a victim of a stolen identity. You can go to MyFico.com and request a copy (cost is $20.00) the cost is well worth it to keep an eye on your credit. It’s important to take action and dispute any items that are reported in error. After all you never know when your fico score may come in handy.

How low can rates go? Seems to be the question I get a lot these days. The honest answer is…..who knows, but if the rates are at least a ½ percent lower than what you are paying now you may want to consider a refinance.

When weighing the benefits of a refinance it is always good to consider how long you plan on being In the home, how many months you have already paid into the loan , the costs involved in refinancing as well as how much of a monthly house payment you can save.

One of the bigger hurdles today in refinancing is the lack of equity as the last few years as been tough on values. Depending on who owns your loan will make the difference on being able to refinance and if there will be any Mortgage Insurance.

HARP also known as Home Affordable Refinance Program will allow refinancing up to 125% LTV. The benefit of this program is if you don’t have equity in this current market you may still be able to refinance.

This program has been instrumental in allowing me to help refinance three of my past clients just this last month. It does work!

If you have a rate of 5% or higher I encourage you to call to see what you may be able to save. Rates are low now, so what are you waiting for?

It is not easy these days, cost of living has sky rocketed (Yeah cantelopes for $4.00 each) we wonder if we will have a job tomorrow (My good friend just got let go after 23 years of service) and (at least) my dollar does not seem to be buying everything I need to support my family, let alone pay my bills.

So I make a choice, food on the table versus paying the mortgage on time. Should be an easy choice right? Wrong!

You know the phone calls will start and you know they are going to charge a late fee which will make it even harder to catch up come next month. After all living paycheck to paycheck seems to be the new normal.

I tried the Obama bail out programs, I went to the websites to see if I qualify I checked to see if my mortgage was owned by Fannie Mae or Freddie Mac ( I found out that even if your loan does not show up on these websites Fannie or Freddie can still own your loan so you always want to double check with your current lender) The problem is the banks don’t seem to want to help or maybe the people they hired don’t know what they are doing. Either way relief is just not in sight.

For most of us I think the fear comes from not knowing what can happen, the consequences if you will. The Loathing comes from finding out the consequences of being late and the disgust we feel when no one seems to care.

If you pay your mortgage after the 15th but before the 30th day will earn you a late fee of 5% of your payment amount (in most cases) which of course will make next months payment that much more.

Being late more than 30 days on your mortgage will impact your credit. Your lender will report your mortgage late to the bureaus (Equifax, Experian, and Trans Union) Once your mortgage lender does this your fico score will drop. You may be thinking who cares, but when your mortgage lender reports this late the majority of your other creditors that you may have credit cards with etc., will more than likely immediately lower your credit limit that you have with them and ready for the good part……Increase your Interest Rate!

Talk about the double Whammy. You thought you were having troubles before? Now your credit card payments have just increased, your credit limits have decreased possibly to the point where you can’t borrow anymore and your fico score just plummeted which will now make you ineligible for at least two of the Obama programs that you may have been eligible for.

If you believe you are eligible to refinance because Fannie Mae or Freddie Mac owns your mortgage and you are having troubles making your house payment before you go late on your mortgage or your credit cards, it may make more sense to possibly be late on bills that don’t show up on your credit immediately like a phone bill or gas bill. Don’t get me wrong if you fail to pay them and the account goes into collection it will be reported on your credit, but, if you have cut your expenses back as far as you can and are stilling having problems making ends meet, the phone company will not report you late if you pay them late. This may just give you sometime to see if you can qualify for a lower payment with a refinance even if you owe more on your home than its worth!

HAMP and HARP are just two of the programs currently supported by the Obama Administration, check them out one may be right for you.